Self employment, offsetting losses from previous years against profit this year

I have one employment and one self employment. The self employment made losses in years 17/18,18/19 and 19/20 but a profit in 20/21 and this year 21/22. I'm trying to put a figure in the self assessment online form for "Loss brought forward from earlier years set-off against 2021-22 profits: (optional)" of 1245, which is equal to the "Net business profit for tax purposes:" amount shown just above that box. I'm unable to do so, because the page keeps generating a red warning "IMPORTANT: Please check the help on the 'Loss brought forward' field and review the figure entered in this box". When I check that help "Help about: Self Employed short 34 - Loss brought forward from earlier years set-off against 6 April 2021 to 5 April 2022 profits" it just says "Include the amount of any losses you sustained in this business in the tax year 6 April 2020 to 5 April 2021 and earlier years which you have not yet used, to be set-off against the 6 April 2021 to 5 April 2022 profits." That is what I am already doing. Why is the figure I'm entering in this box deemed incorrect? Is there something I need to do elsewhere in the Self Assessment online form to confirm that I still have unused losses from three previous years that I want to offset against profit from this year? Thanks.

I had the same problem. Loss 20/21, small profit 21/22. Got the red warning. Tried various numbers and searched through the help but to no avail. In the end just entered the offset and proceeded to the penultimate page where you can print off your return before submitting. The offset seemed to have been accepted in the final calculation. For me, the warning does not seem to prevent progressing to submission. Not sure why the warning appears. No doubt some HMRC brain will be along to explain.

Hi Lesley,

It is an alert only. As long as the losses you bring forward are not higher than your actual profit, you can click on save and continue to move on.

Thank you.

Thanks for the responses. Yes, it does look like I can submit the self assessment return even though it has a warning and alert showing. The "loss brought forward" figure I've inserted is showing as an income tax relief in the final calculations, as I'd expect.

Hi I’m having the same problem, in the tax year 20/21 due to covid my business ground to a halt, I am 68 so I though that was it, I contacted HMRC and was advised that as my profit was less than £1,000 I didn’t need to submit a self assessment return, unexpectedly my situation changed mid 2021 and I made a profit. I had incurred costs during the previous year, and therefore made a loss, can I claim this against my current profit?

Hi,

To declare the losses in tax year 2020 to 2021, you will either need to submit a 2020 to 2021 tax return showing the losses or write to HM Revenue and Customs BX9 1AS, enclosing a calculation to show how you arrived at the loss figure. You can carry forward losses and set them against the profits in a future tax year.  

You will find some guidance on losses for tax year 2020 to 2021 at:

HS227 Losses (2021)

Thank you.